Boeing CEO calls Trump’s Air Force One deal a risk it ‘probably shouldn’t have taken’

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The CEO of Boeing said that the deal with Trump to build Air Force One probably shouldn't have been made. Boeing has lost more than $1 billion on the contract.

Air Force One is a very unique negotiation, a very unique set of risks that Boeing probably shouldn't have taken, but we are. We're going to recognize the cost associated with it.

The new Air Force One airplanes will be built for a fixed price of $3.9 billion. A firm-fixed-price contract is where the contractor is paid the same for a project no matter what costs it incurs.

The new agreement came after Trump threatened to cancel the government's previous Air Force One order as a cost-cutting measure. The original project was thought to cost between $4 and $5 billion. According to CNN, Trump wanted the plane to be built by 2021.

It isn't terribly surprising that Boeing didn't meet the timelines. Dennis Muilenburg, the company's CEO, was fired and replaced by Calhoun, after the company was hit by a global Pandemic.

When a COVID line goes down or a group of workers steps out, it's rough for the company.

He noted that he didn't want to take on any more fixed price contracts, and that he had a different philosophy about them than the company's previous CEO.

The Air Force One project is what caused Boeing to have a messy quarter. We took some risks not knowing that an inflationary environment would take hold.

The first Air Force One will be delivered in 2024, and the second in 2020, according to a report. According to CNBC, it could be delayed further, and Boeing's financial statement says it may continue to lose money on the project.

The project, which is now over a billion in the hole, was called an "outstanding value to taxpayers" by Boeing in a year ago.

Boeing is proud to build the next generation of Air Force One, providing American Presidents with a flying White House at outstanding value to taxpayers. President Trump negotiated a good deal on behalf of the American people. pic.twitter.com/m0HtGfXVlv

— The Boeing Company (@Boeing) February 27, 2018

$2 billion per plane is still a lot of money. The F-35 is famous for being obscenely over budget, with the final price tag expected to be around $1.6 trillion. Each plane costs around $2 billion, but that figure will go down as more planes are made.

Boeing's Air Force One will likely be very advanced and able to dodge missiles and survive nuclear fallout, but there is a cost to making it.